|SGasoline demand increased by an average 139
MB/D for the past five years, while distillation capacity increased about 200
MB/D. At 50% gasoline yield, the added
capacity could have provided 100 MB/D more gasoline. Thus, imports have risen to make up the
difference, and because the imports have been competitively priced, U.S.
refineries have run at slightly lower utilizations.
|SU.S. gasoline demand forecasts are up,
compared to the last 5 years, and are projected to increase about 200 MB/D
range per year. If domestic production
were to meet this demand, U.S. capacity would have to increase about 400 MB/D
each year, or if imports were to meet half the increased demand, capacity
would need to increase by 200 MB/D per year.
|SWhile the higher margins this year are likely
to encourage capacity increases, the recent low capacity addition rate
combined with what is publicly available in the planning and construction
pipeline, imply that capacity addition rates may take a few years to reach an
annual capacity addition rate over 300 MB/D.
|SMoreover, U.S. refiners are dealing with
product quality improvements and MTBE bans that are likely to reduce yields,
at least in the short run, meaning more imports will be needed.